Fees and Ownership Made Simple
When investors come to Linden Thomas & Company after hiring a retail investment advisor, we often learn the advisor never shared with them the real costs, in addition to other factors, that impact investor results. This is why we created Institutional Direct.
When a portfolio is directly managed through individual securities, investors are not faced with hidden fees and pricing disadvantages commonly seen in pooled products. Since Linden Thomas & Company acts as a money manager on equities and buys bonds directly for each client, the cost is reduced and the client benefits from total transparency.
Portfolios can be impacted in several ways, one of which is cost. Big Wall Street firms, as well as much of the industry advisors, charge an annual fee plus a fee to invest in products like mutual funds, ETFs, and annuities. The challenge with industry product fees as well as other items can, and do, impact investor results. Other seldom discussed items not transparent to the investor are expense ratios, trading costs, pricing disadvantages, spreads on trades, taxes, and small investor herding impact.
Many of these are not only not transparent but they are seldom fully disclosed in the investor perspective. Because most industry advisors don't qualify to manage their client's assets directly. This often means investor assets will be turned over to fund companies. Between advisor costs and the hidden costs of investing, fees can be much larger than investors realize.
Understanding the hidden costs of retail advisors
Benefits of Linden Thomas & Company Institutional Direct:
- Investors assets are managed directly
- Portfolios are tailored specifically to investors' needs
- Assets are held in the client's name
- Clients have total transparency of holdings
- Total tax harvesting and gifting benefits
- Flat fee on equities, no trading cost on Linden Thomas & Company institutional portfolios
- No annual fee on fixed-income. 100% of cash flow goes to the investor
- Each portfolio is tailored specifically to income growth and timeline need
- Proven results with a team of dedicated professionals
Disadvantages of retail investment or fee-only advisors:
- High advisor costs
- Investors are subject to hidden fees of products
- Pooled investing
- Hidden trading costs of mutual funds not transparent
- Investment products can't be tailored
- Fixed-income funds have pricing disadvantages, trading costs and annual costs, which all impact investor income negatively
- An investor has minimal transparency of real costs and holdings
- No control over tax-loss harvesting of individual securities
- Seldom do advisors have a team of dedicated professionals building portfolios directly